Free Enterprise System

Which of these characteristics is TRUE of the American free enterprise system?

• Producers are forced to sell a certain quantity of items

• Individuals can purchase goods and services that they want

• Only the government can own and sell property

• There is no profit motive for businesses

What is the primary purpose of the Consumer Product Safety Commission?

Identify THREE types of goods that the United States government subsidizes in the American free enterprise system.

Compare the role of consumers and entrepreneurs in a free enterprise system.

Briefly explain the role of government in the free enterprise system.

The concept of economic freedom allowed in the free enterprise system can be defined as...

• resources are scarce and that factors of production must be used wisely.  If resources are wasted then fewer goods and services can be produced.  Fewer wants and needs can be satisfied if there are fewer resources

• firms will combine and reduce competition.

• consumers are free to choose what to buy, their jobs, their employers, what they use their money for.  Business owners can choose when, where, and what they produce.

• rich seem to get richer and poor seem to get poorer.

Which of the following choices is a NEGATIVE impact of inflation?

• Reduces unemployment

• Strengthens currency

• Lowers cost of borrowing money

• Bills are harder to pay and planning for the future is more difficult.

One of the ways that the government intervenes in a free enterprise system is through..

• Protecting public safety by ensuring vehicle safety/emissions standards

• Setting prices for certain goods

• Setting fixed output quantities for companies

• Setting wage levels

Social Security and Medicare are both examples of which of the following concepts?

• Government initiatives intended to close the wealth gap between the richest and poorest people.

• Government programs that increase a person's economic security.

• Government sponsored initiatives to provide private security for older citizens.

• Government programs that are designed to monitor how citizens spend their money on healthcare related services.

Which of the following choices is NOT a benefit of the free enterprise system?

• Creation of wealth

• Individual freedom

• Variety of goods offered

• Uneven economic growth